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Tanya Duncan is Senior Manager at Deloitte Consulting, the world's largest private professional services firm. She previously worked for Owens Corning, a Fortune 500 global building materials company in Toledo, OH. She is experienced in global SAP deployments and has authored SAP books:
In make-to-stock production manufacturing orders collect costs. Materials are produced based on a production plan by material requirements planning (MRP), not based on customer demand.
Accounting documents are posted throughout the month to both overhead and production cost centers in a plant. These are known as direct postings.
One of the major tasks for functional SAP professionals is configuration. You configure SAP to perform properly based on business requirements during the realization phase. On your first SAP project, it can be overwhelming to know where to start when configuring a module.
How do you back track from a costing sheet to find out where it is actually used? Unfortunately, there is not an easy way to verify this without going through configuration screens or table data. This is also complicated because costing sheets can be attributed to material masters or orders. I recommend you use two tables in Transaction SE16 or SE16N to determine where costing sheets are used in a standard cost (table KEKO, field KALSM) or on an order (table AUFK, field KALSM).
This question was posed specifically about project systems, but this applies to all cost objects in SAP that require settlement: Production orders, process orders, sales orders, and internal orders.
Settlement occurs at month end so the remaining balance on cost objects can be offset and the variance can post to a final resting place on the financial statement. During settlement, the difference between the debit and credit of the order is transferred to the cost center based on the finished good material’s profit center. Each cost object in Controlling has a settlement rule to determine where and how the remaining costs should settle. The settlement rule is generated based on the settlement profile assigned to that order type.
The settlement profile configuration determines if the order is settled in full, can be settled, or not, what receivers are valid, what allocation structure is relevant, along with many other settings. This is the key piece of settlement configuration that links together other elements like the allocation structure. A different settlement rule is generally required for each cost object.
The allocation structure determines what source cost elements are posted to what settlement cost centers. For example, you can group together material costs to see them separately from labor costs and service costs. You can also settle those costs to different settlement cost elements to have more visibility to that level of detail during settlement.
To learn more about settlement rules and other SAP FICO topics please visit our SAP FICO Learning Center please click here.
An allocation structure allocates the costs incurred on a sender by cost element or cost element group, and it is used for settlement and assessment. An assignment maps a cost element or cost element group to a settlement or assessment cost element. Each allocation structure contains a number of such assignments.
A process order is a manufacturing order that is used in process industries. A master recipe and materials list are copied from master data to the order. A process order contains operations that that are divided into phases. A phase is a self-contained work-step that defines the detail of one part of the production process using a primary resource.
In process manufacturing, only phases are costed, not operations. A phase is assigned to a subordinate operation and contains standard values for activities, which are used to determine dates, capacity requirements, and costs.
A production order is used for discrete manufacturing. A BOM and routing are copied from master data to the order. A sequence of operations is supplied by the routing, which describes how to carry out work-steps.
A sales order is a customer request for delivery of goods or services at a certain time. A sales order line item can be a real cost object if you are using nonvaluated inventory.
A settlement profile contains the parameters necessary to create a settlement rule for manufacturing orders and product cost collectors and is contained in the order type.
When does the activity type on someone’s personnel record trump the rate on a material or routing?
How does SAP determine costs from material master through production orders, and settlement (including WIP settlement) including material, labor and overhead costs?
The SAP cost component structure determines which costs to include in a cost estimate, whether to include the variable or total costs, and how to group costs in cost components.
You can create cost components for categories like raw materials, packaging, overhead, labor, and setup.
SAP ECC allows you to create up to 40 cost components, or 20 if you include both fixed and variable costs.
SAP S/4HANA allows you to create up to 120 cost components, or 60 if you include fixed and variable costs.
The chicken or the egg, vanilla or chocolate, red or white wine, consulting or industry? Are these some of the biggest questions in the universe? You may argue not, however for a SAP professional, deciding between a consulting or industry position is an important career choice. This is one career choice you may reevaluate throughout your career depending on personal life events, career goals, and present opportunities. The truth is, there is no wrong choice. It’s about what opportunity works best for you at that point in your life and career.
A significant, but often overlooked, part of an SAP professional's career is remaining cognizant of the latest SAP trends and technologies. While many of us are in the nitty-gritty details of our SAP implementation, a big picture view of our organization, project, and SAP as a technology company allows us to stay focused on what’s really important. To be successful SAP professionals, we need to know the latest and greatest news about SAP upgrades, enhancement packs, and strategies and understand how they impact our focus area.
This week we are starting a new blog series on the most common SAP Controlling pitfalls and how to avoid them. SAP Controlling 2013 speaker Tanya Duncan is up first.
In my opinion, the most common Controlling pitfall is choosing design alternatives without understanding the ramifications. Controlling is an interesting and, in my opinion, more fun module compared to Finance and other SAP modules. It is more flexible in how you achieve requirements, but it also requires attention to building a robust, sustainable design.
I recently used some interesting configuration in the valuation variant to value externally and intercompany purchased materials. My client has unique challenges because they are vertically integrated.
They produce almost every raw material that goes in to their finished goods including packaging and the machinery to produce finished goods. The amount of intercompany purchases is massive and we needed a sustainable way to value purchased items and reference the purchasing conditions for intercompany markups and other charges like freight and shipping labor.
This configuration is a multi-step process, but it’s fairly simple when you have all the pieces configured correctly.
This week we are profiling Tanya Duncan, SAP FICO Consultant with Deloitte. Learn more about Tanya and her start with SAP through the SAP University Alliance program.